Stock-Based Compensation

For the third quarter of 2018, the Company recognized stock compensation expense of $2.0 million, and related tax benefit of $0.8 million. For the third quarter 2017, the Company recognized stock compensation expense of $2.6 million, and related tax benefit of $1.5 million. For September year to date 2018, the Company recognized stock compensation expense of $6.7 million, and related tax benefit of $4.0 million. For September year to date 2017, the Company recognized stock compensation expense of $6.8 million, and related tax benefit of $3.3 million.

Performance Shares

During 2018, the Company granted performance awards associated with the Company’s Class A stock to certain senior officers. The payment of performance shares, which will be satisfied with the issuance of shares out of treasury stock, is contingent upon the achievement of specific operating and pretax earnings and total shareholder return (“TSR”) goals over a stated period of time. The maximum number of performance shares that may be earned is 200% of the target shares originally granted. These awards have a three-year performance period and will cliff vest after the approval by the Compensation Committee, if not forfeited by the recipient. No dividends are paid on these performance shares.

The financial measure performance shares may be earned upon the achievement of two financial goals. For each of the two financial measures, there are annual goals set in February of each year, with the total award payout for 2018 grants based on a cumulative measure of the 2018, 2019 and 2020 goals. Accordingly, the Company remeasures the fair value of the 2018 and 2017 financial measure performance shares each reporting period until the third year goals are set, after which the grant date fair value will be fixed for the remaining performance period. As of third quarter-end 2018, for both the financial measure performance shares granted in 2018 and 2017, the current fair value for the financial measure performance shares was $23.17. In addition, during the first quarter 2018, the final year of goals was set for the performance shares granted in 2016. Therefore, the grant date fair value for the 2016 financial measure performance shares was set at $28.40, and will remain fixed for the remaining performance period.

TSR performance shares may be earned based on the Company’s TSR relative to the S&P SmallCap 600 Index. The 2018 TSR performance shares have an estimated fair value of $31.38, which was computed using a Monte Carlo simulation model incorporating assumptions for inputs of expected stock price volatility, dividend yield and risk-free interest rate.

A summary of the status of all nonvested performance shares at target as of third quarter-end 2018 and year-to-date changes is presented as follows below (in thousands of shares except per share data). The majority of the vested shares below is related to the 2015 performance share grant, which cliff-vested after approval from the Compensation Committee during the first quarter of 2018.



	Financial Measure Performance Shares				TSR Performance Shares
	Shares		Weighted Average Grant Date Fair Value		Shares		Weighted Average Grant Date Fair Value
Nonvested at year-end 2017	592		$	22.32	240		$	18.17
Granted	163		28.64		59		31.38
Vested	(229	)	16.62		(109	)	16.01
Forfeited	(45	)	26.18		(17	)	22.94
Nonvested at third quarter-end 2018	481		$	25.43	173		$	23.56

Restricted Stock

A summary of the status of nonvested restricted stock as of third quarter-end 2018 and year-to-date changes is presented as follows below (in thousands of shares except per share data).



	Shares		Weighted Average Grant Date Fair Value
Nonvested at year-end 2017	440		$	18.76
Granted	153		28.94
Vested	(104	)	19.70
Forfeited	(44	)	20.19
Nonvested at third quarter-end 2018	445		$	21.89